In a volatile equity market and with interest rate cycles turning, many investors are rebalancing their portfolios toward fixed-income instruments.
SMC Global, in their latest stock recommendations, highlighted that some of the most attractive options today are fixed deposits (FDs) offered by non-banking finance companies (NBFCs). These instruments provide stable returns, higher interest rates than many bank FDs, and additional incentives for senior citizens, women, and long-term depositors.
ICICI Home Finance
ICICI Home Finance is currently offering interest rates starting at 6.75% per annum, with tenures ranging from 39 months to 45 months. Investors can earn up to 7.10% per annum for longer maturities. A significant draw is the 0.35% additional benefit for senior citizens, which makes ICICI Home Finance one of the preferred NBFCs for retirees seeking safe and predictable returns. The minimum investment required is ₹10,000, making it accessible to small savers as well.
LIC Housing Finance
LIC Housing Finance, backed by one of India’s most trusted insurance brands, offers interest rates between 6.70% and 6.90% per annum depending on tenure. For 15 months, the FD rate stands at 6.75%, while longer durations fetch slightly higher yields. Senior citizens receive an additional 0.25% on all schemes, giving them an edge over regular investors. The minimum deposit requirement is ₹20,000, making it slightly higher than some competitors, but the LIC brand name and reliability often outweigh this limitation for conservative investors.
Mahindra & Mahindra Financial Services
M&M Financial Services, part of the Mahindra Group, is offering FD rates starting at 6.60%, with a peak of 7.00% per annum for certain tenures such as 15 months. Senior citizens again benefit from an additional 0.25%, enhancing the effective return. With a minimum investment of just ₹5,000, M&M Financial’s FD schemes are particularly attractive for first-time depositors or small investors who prefer short commitments with decent returns.
Shriram Finance
Shriram Finance, one of the largest NBFCs in the retail lending space, is offering competitive FD schemes with a minimum investment of ₹5,000. What makes Shriram stand out is its 0.50% extra benefit for senior citizens, coupled with 0.15% additional for renewals and 0.05% extra for women investors. These layered incentives make Shriram Finance a strong choice for long-term customers who seek incremental gains over time.
Why NBFC FDs appeal to investors
NBFC FDs have become popular because they often offer higher interest rates compared to traditional bank deposits, while still maintaining strong credibility. Companies like LIC Housing, ICICI Home Finance, Mahindra Finance, and Shriram Finance are backed by established financial groups, giving depositors added confidence. Moreover, the extra benefits for senior citizens and women investors provide inclusivity and better financial security for these segments.
For investors seeking stability, NBFC fixed deposits present a compelling option in today’s uncertain market. While they do not carry deposit insurance like bank FDs, the strong credit ratings of these NBFCs and their history of performance make them attractive for risk-averse investors. With flexible tenures, accessible minimum deposit amounts, and special add-ons for seniors and women, NBFC FDs are increasingly finding a place in the portfolios of both retail and high-net-worth investors.